The publisher said newspaper revenue dropped 20 percent in the third quarter, and print ads dropped by 28 percent; both of these numbers are worse than Q2, which saw revenue drop by 14 percent and print ads by 20 percent.

No relief from Web ads, either: Internet revenue dropped 18 percent, a decline from the nine percent drop in Q2. And online display ads, which had been more or less flat for the last few quarters, fell off a cliff, dropping 14 percent.

Don’t be duped by headlines reporting a drop in the newspaper division’s losses, by the way. That’s due to one-time accounting charges the previous year. If you look at operating revenue and expenses via a less formal, but more practical, lens, the results are very unpleasant: Losses increased by 55 percent (see summary below; click to enlarge).

Want more bad news? Okay: The company’s magazine group says revenue dropped 33 percent, driven by a staggering 48 percent drop in ad sales at Newsweek.

If you’re at, say, Time Warner’s (TWX) Time Inc. and want to whistle past the graveyard, you can try blaming the drop on the title’s unsuccessful overhaul. But I find it hard to believe that Newsweek’s woes don’t reflect a larger magazine malaise. We’ll see next week.

The good news, as always: The big difference between the Post and many other publishers is that its parent company doesn’t depend on print media. The company’ core education business, which is what has sustained it for many years, continues to do well.

The latest unpleasant news comes from magazine heavyweight Meredith (MDP), which does its best to explain that things aren’t that bad: Two of the publisher’s big titles–Better Homes and Gardens and Family Circle–saw ad revenue grow in the last quarter, and the company says its magazine unit notched its “third consecutive quarter of advertising performance improvement.”

That sounds good, right? Except that magazine ad revenue still dropped five percent compared with the same quarter a year–and last year’s quarter was a terrible one in which ads dropped by 18 percent.

More data points to watch for in the next few days: The Washington Post (WPO), which reports tomorrow, and Time Warner (TWX), due up next week.

Quite a bit!

Job One has been overhauling MySpace, which is still very much a work in progress. But Miller’s full plate includes lots of other tasks too. Like trying to convince Google (GOOG) or Microsoft (MSFT) to pony up for a big search deal to replace the Google/MySpace deal that expires next year.

Equally difficult job: Trying to figure how to get consumers to pay for some of the content News Corp. currently provides for free on the Web.

The Los Angeles Times advances that part of the story this morning with a report that Miller is “believed to have met” with rival publishers–including those from the New York Times (NYT), Washington Post Co. (WPO), Hearst and Tribune Co.–about creating a consortium to charge for online news.

I believe it. My understanding is that while Murdoch has been vocal about his intent to start charging consumers to read his stuff, the more sober assessment within News Corp. (which owns this Web site) is that charging for news will only work if there is a critical mass of publishers trying to do it together. How many would that be? “Enough people so that it matters,” a News Corp. exec tells me.

Whether you could actually get enough big publishers to work together (something that start-up Journalism Online is trying to do, in its own way; so for that matter, is the Associated Press) is an open question, of course. And then there are the inevitable antitrust issues.

But I think the most practical problem for News Corp., and everyone else who works in the news business, is that from the consumer’s perspective, very little of the stuff we produce is worth paying for. That doesn’t mean you can’t figure out how to sell specialized bits of content (a la The Wall Street Journal or Consumer Reports). But a great deal of the stuff we make can be found all over the Web, with little to distinguish it, and the model that used to support this content–near-monopolies on eyeballs and ad dollars–has disappeared. Pay wall or no, that’s going to have change going forward.

That projection comes from a survey of Web users that Internet analyst Imran Khan commissioned last month. Khan’s survey found that 37 percent of respondents were familiar with the Kindle. And of that group, five percent said they already owned one of the devices, and another 15 percent said they expect to buy one within the next year. Extrapolating those results for the U.S. population, Khan figures that Kindle ownership will hit 10 million in the next 12 months. (Click chart to enlarge)

OK. But what if Amazon (AMZN) dropped its proprietary ebook format, a supposed weakness that competitors Sony (SNE) and Plastic Logic are trying to take advantage of by agreeing to use an open, common standard? Won’t matter that much, say Khan’s respondents: Only 15 percent of people who say they don’t plan to buy a Kindle cite format issues as a concern. I’m surprised the number is that high.

On a related note: Whatever happened to Amazon’s plan to work with the New York Times (NYT) and the Washington Post (WPO) to bundle newspaper subscriptions with its jumbo-sized Kindle DX reader?

When Amazon unveiled the DX in May, it briefly mentioned plans to sell the $489 machine at a discount to people who bought subscriptions to the Times, Post or Boston Globe, but didn’t say much more than that. Details were supposed to be released “this summer.”

Now we’re midway through August and we haven’t heard a peep about the program. What gives? I asked Amazon, the Times and the Post, and none of them had anything to say–save for a comment from a Post rep who said that the subscription-plus-discount offer would be “a small experiment.”

That distinction popped up this morning after Politico detailed an “astonishing offer” by the paper’s business staff to lobbyists–a chance to underwrite “salons” with D.C. bigshots, hosted at the home of CEO Katharine Weymouth.

A promotional flier Politico got its hands on also promised that the Post’s editorial staff would be part of the events, including one scheduled for July 21. But that part isn’t true, a Post spokeswoman told me via email this morning:

The flier circulated this morning came out of a business division for conferences and events, and the newsroom was unaware of such communication. It went out before it was properly vetted, and this draft does not represent what the company’s vision for these dinners are, which is meant to be an independent, policy-oriented event for newsmakers.

As written, the newsroom could not participate in an event like this.

We do believe there is an opportunity to have a conferences and events business, and that The Post should be leading these conversations in Washington, big or small, while maintaining journalistic integrity. The newsroom will participate where appropriate.

OK, so that’s cleared up. But let me play devil’s advocate: What exactly would be so wrong about getting the paper’s reporters or editors to to participate in one of these?

This certainly wouldn’t be the first time that the Post has been at the nexus of power, money and influence. In fact, Weymouth’s grandmother, Katharine Graham, was famous for hosting gatherings much like these at her house. And publications of all stripes, including this one, as well as Dow Jones, which owns this site, frequently charge fees to attend networking events where their editorial staffs participate.

And you’re likely to see more of this stuff, not less, as publishers search for revenue streams besides advertising to stay afloat. Any tempest you see about this today is going to look quaint in a couple of years.

UPDATE: The ensuing uproar has forced the Post to cancel the events altogether. Post execs are now busy pointing fingers at each other, although it seems clear a lot of the blame is going to be laid at the feet of the paper’s conference group and/or marketing team.

But note Howard Kurtz’s report on his employers’ reactions to the reaction: Weymouth (or her proxies) say she was OK with the idea, but not the marketing; Executive Editor Marcus Brauchli says he was OK with the concept, but not this version:

Weymouth knew of the plans to host small dinners at her home and to charge lobbying and trade organizations for participation. But, one of the executives said, she believed that there would be multiple sponsors, to minimize any appearance of charging for access, and that the newsroom would be in charge of the scope and content of any dinners in which Post reporters and editors participated.

Brauchli said he had been involved in discussions, stretching back to last year, about newsroom participation in conferences of the sort commonly staged by major news organizations.

But he said he made clear to the company’s marketing officials that Post journalists would participate only if they could substantially control the nature of any such conference. Brauchli said he was blindsided by the wording of these fliers and that they are an embarrassment to the newspaper.

In the old days, the fact that this story broke just before the long holiday weekend would help the Post. But this story will now have legs, egged on by stuff like this:

It’s progress, at least: Amazon (AMZN) had much longer outages, multiple times, when it rolled out the first Kindle in 2007.

Amazon doesn’t say a peep about things like actual sales numbers, so no idea how many of these things it sold in the first few days. I would guess, though, that the company didn’t expect gangbusters sales of the device, for a couple of reasons:

• Newspaper and magazine readers are one of the major target markets for the gadgets. And publishers, including the New York Times (NYT) and the Washington Post (WPO) are supposed to offer discounts on the machine for (some) digital subscribers. But unless I missed it, no one has actually rolled out any discount programs yet.
• The really big market for the DX will be college students, but it’s going to be quite some time until you see many of these on campus. There’s not much point to buying a DX for school until you can get your textbooks on it, and that won’t happen until schools (and, crucially, faculty) buy in. But Amazon is conducting a test with just six colleges, and a few hundred students, this fall.

One bit of good news for folks who absolutely have to have a DX in the near future: There should be a few more in stock in the next couple weeks, when folks like me who got a review copy for 10 days need to return them.

That’s why this fine Three Wolf Moon T-Shirt, available for as little as $9.78, became one of the online retailer’s most popular items in the last week. Prompted by a link at the IAC (IACI)-owned site, CollegeHumor readers bought up scads of the shirts, and filled Amazon (AMZN) with glowing reviews like these:

Unfortunately I already had this exact picture tattooed on my chest, but this shirt is very useful in colder weather…

This is the only t-shirt Chuck Norris wears. Wolves howl at the moon, and the moon howls at Chuck…

…So I’m looking for threads that say, “Hey baby…I’m real boss!” when I stumble upon this epic creation. The wolves spoke to me in a language all their own; it was like German, Mongol, and Bitchin all mixed together. I mean, one wolf howlin at the moon is major…but three???

Why bother? If you have to ask, you’re probably never going to get the joke. More info via the Washington Post, including the most pertinent detail: As clever as the CollegeHumor dudes are, they neglected to actually figure out how to profit from the stunt themselves.

CEO Eric Schmidt reiterated that position, which he’s already made a couple times this year, in an interview with the Financial Times. Though Schmidt did allow that Google (GOOG) had at least mulled the idea at one point, which will be old news to MediaMemo readers:

FT: Would you ever consider buying a newspaper; they’re cheap right now?

ES: We’ve actually looked at this and we’re trying to avoid crossing the line between the infrastructure and technology that Google provides and the content that our partners provide. There is a line and we’re trying to stay on our side it.

Hey, why does that sound familiar? Ah, that’s right.

I’m told that while Google execs have brought up the notion of snapping up distressed newspapers using its huge cash hoard within the past year, those talks have never gotten serious. It’s hard to see how they could: Google has emphatically stayed out of the content business so far, and it’s unclear why it would change direction now–and invest in a shrinking industry at the same time.

Schmidt and the FT also recovered other material that’s been out for a bit, including the search giant’s talks with the Washington Post (WPO), and presumably, the New York Times (NYT), about some kind of collaboration. In this case, Schmidt refers vaguely to “online news versions that somehow address the immediate needs of people and for which advertising works better.”

And while he was at it, Schmidt didn’t hold out hope for rekindling a  Yahoo/Google search deal. Which is good, since Yahoo (YHOO) and Microsoft (MSFT) look like they’re close to getting something done: “…never say never in business. Carol [Bartz, Yahoo chief executive], of course, is a very, very able and strong CEO and my sense is that she’s very focused on getting Yahoo back to its former glory, which is a great project.”

Remember last week, when Google was forced to explain why it wasn’t single-handedly destroying American newspapers?

Turns out the company is in talks with some of the country’s biggest newspapers to…well, save them.

But, that isn’t exactly the right phrase. In fact, it’s not clear how to describe the talks. But we do know that Google (GOOG) is chatting with both the Washington Post (WPO) and the New York Times (NYT), because that’s what employees of the Washington Post and the New York Times are reporting today.

Here’s the Post’s Howard Kurtz, in a column this morning castigating newspapers for being too slow to react to the Web:

“Post Co. chief executive Donald Graham and Google chief executive Eric Schmidt and their lieutenants have been holding talks about a possible collaboration. This could range from creating new Web pages to technological tools for journalists or readers. Hanging over the talks is the reality that the search giant, while funneling vital traffic to news sites, vacuums up their content without paying a dime.

Post executive Philip Bennett confirmed the discussions, saying: ‘We’re talking to each other about improved ways of creating and presenting news online.’ He calls it ‘an informal collaboration’ that ‘has produced some interesting ideas already. I’d say that on the journalism side of the conversation we’ve learned a lot.’”

Here’s a Google spokesperson’s description of the meeting, for what it’s worth: “This was an informal meeting, and we’re always talking with publishers to find new and creative ways to help them make money from compelling online content.”

I assume that the unnamed spokesperson will also describe meetings with the New York Times, which the Times’s Brian Stelter reported on today–via Twitter–from an internal presentation that the paper’s Web site put on for its newsroom.

Here’s the Tweet: “At a digital strategy meeting at the Times. News nugget: Wash Post isn’t the only paper in talks w/ Google. NYT is, too.”

I’m following up with Times folks about said talks, but it’s no surprise to hear about them. That’s because contrary to what you may have heard during Senate hearings about the state of the newspaper business last week, every sentient Web publisher realizes that Google can be a huge boon, directing a firehose of traffic to their content.

Indeed, a lot of the gripes you’re hearing about from publishers are really just pleas for Google to please direct more traffic to their sites. That’s the gist, for instance, of NYT digital boss Martin Nisenholtz’s anecdote about typing “Gaza” into the search engine and getting Wikipedia and Twitter messages, before he sees a Times story.

Google’s argument is that it is a neutral arbiter when it comes to this stuff and simply provides links based on the results of its black-box algorithm. So, it will be difficult for it start giving newspapers–no matter how august and important–a leg up when it comes to search results, because everyone else will want in too.

Then again, Google is facing the increasingly likely prospect of antitrust charges over the next few years. Some of the pressure is coming from Microsoft (MSFT), which is working as hard as it can to beat that drum. But the search giant is certain to face suits from the struggling newspaper business as well.

Thus, cutting some deals in advance may not be the worst idea.

Side note: Kudos the Times’s Web-savvy Jennifer 8. Lee for providing a comprehensive Twitter stream from her company’s meeting. Well worth checking out.

UPDATE: Here’s a guess–perhaps Google has been talking the papers about a new, automated filter that will fetch news for users without asking them what they want.

Google does have plans for a solution. In about six months, the company will roll out a system that will bring high-quality news content to users without them actively looking for it. That’s what TheWrap.com’s Sharon Waxman says Schmidt told her he was working on last month:

“Under this latest iteration of advanced search, users will be automatically served the kind of news that interests them just by calling up Google’s page. The latest algorithms apply ever more sophisticated filtering–based on search words, user choices, purchases, a whole host of cues–to determine what the reader is looking for without knowing they’re looking for it.

And on this basis, Google believes it will be able to sell premium ads against premium content.

The first two news organizations to get this treatment, Schmidt said, will be the New York Times and the Washington Post.

Does the New York Times make more money from this arrangement, I asked? No, Schmidt confirmed, it won’t. But by targeting the stories that readers will want to read, it will get more hits out of the stories it has, which will drive its traffic and ultimately support higher advertising rates beside the stories.”

It’s worth noting that a “source close to Google”–who might possibly be someone on Google’s public relations staff–dismissed Waxman’s report, without saying which part was inaccurate, according to VentureBeat: “A source close to Google has raised serious questions about the veracity of Waxman’s claims about Schmidt’s comments. The company has not confirmed any of her post’s content.”

And News Corp. (NWS), whose Wall Street Journal has long required a subscription for full access to stories, is among the most most aggressive. During his earnings call this afternoon, CEO Rupert Murdoch said he planned on exporting the WSJ’s online pay model to other News Corp. sites.

“We’re absolutely looking at that,” Murdoch told a reporter. Expect to see movement on some of his stronger properties “within the next 12 months,” he said.

But Murdoch also made it clear that he doesn’t plan on selling his content via the Kindle, as publishers like the Washington Post (WPO) and the New York Times (NYT) are doing. Here’s part of his opening remarks:

That it is possible to charge for content on the web is obvious from the Journal’s experience. We are now in the midst of an epochal debate over the value of content and it is clear that, for many newspapers, the current model is malfunctioning. We have been at the forefront of that debate and you can confidently presume that we are leading the way in finding a model that maximizes revenues and returns for our shareholders.

I can assure you that we will not be ceding our content rights to the fine people who created the Kindle. We will control the prices for our content and we will control the relationship with our customers–any device maker or website which doesn’t meet these basic criteria on content will not be doing business long-term with News Corporation.

What’s that all about? During the call, Murdoch reiterated News Corp.’s interest in investing in a Kindle rival, though he insisted it would be relatively small, and that the company is “neutral” about different mobile platforms–”we’re not appliance makers.”

Presumably there are some specific issues News Corp. has with Amazon (AMZN), but I have a hunch that this is one of those cases where it’s straightforward: News Corp. wants to control the price of its content, and it wants a direct relationship with its customers, and Amazon doesn’t allow that.

UPDATE: This PaidContent story spells out one problem: Amazon is demanding 70% of revenue from digital subscriptions it sells, at least from papers the size of the Dallas Morning News. That’s the inverse of the ratio at iTunes, by the way: Apple keeps about 30% of each transaction and the content owners get the rest. Presumably big players like the Times, the Post and News Corp. could cut  a better deal, but Murdoch would want the lion’s share of revenue, and Amazon seems unwilling to give that up.

I also assume that the company is wary of repeating the music labels’ iTunes error, which has led to Apple’s stranglehold on the digital music market.

Then again, Murdoch also boasted about The Wall Street Journal’s new iTunes app, which he said been downloaded 360,000 times in the few weeks following its release. And last time I checked, Apple (AAPL) kept a pretty tight grip on its iPhone apps. So perhaps one of my corporate cousins–News Corp. owns Dow Jones, which owns this site–can explain the difference.

[Image credit: billjacobus1]

Here’s why: The yet-to-be-described subsidy the papers plan to offer to Kindle DX buyers who agree to long-term subscriptions will only be available to a fraction of subscribers–those who can’t get home delivery of the print edition.

From Amazon’s press release: “The New York Times Company (NYT) and Washington Post Company (WPO) are launching pilots with Kindle DX this summer. The New York Times, The Boston Globe, and The Washington Post will offer the Kindle DX at a reduced price to readers who live in areas where home-delivery is not available and who sign up for a long-term subscription to the Kindle edition of the newspapers.”

Since the New York Times is available for home delivery throughout most of the U.S., that means that the majority of its American readers will have to pay full freight–$489–for the gadget. I suppose you could circumvent this if you lived, in say, Minneapolis, by agreeing to subscribe to the Boston Globe instead, which you can’t get delivered at home there. But what’s the point?

My assumption here is that the terms were set by the Times and the Post, which presumably don’t want to cut into print circulation. This makes sense if you’re focused on the very, very short term, since the print editions–both via subscriptions and the ads they contain–still deliver the majority of newspaper revenue for both companies.

Then again, that business isn’t going gangbusters for any of the papers involved. The Times, for instance, spent the early morning hours today hammering out a labor deal that will allow it keep the Globe in business.

The easy way to improve the offer: Copy my corporate colleagues at the Wall Street Journal, and offer a bundle online/offline subscription. But once you start doing that, you get into interesting billing issues, which is going to be fodder for another post.

Who knows? Maybe they’ll try it. Since everyone involved is careful to point out that this is an “experiment,” etc., it’s possible that the papers could reconsider the offer sooner than later. Which I hope they do: It’s a nice-looking device, and it would be a shame if no one ever used it.

But that won’t work for the company’s fourth-quarter results since those show yet more weakness in its print businesses. So here’s some upside: At least the paper’s online business didn’t fall off a cliff in Q4–which is more than you can say about the New York Times.

The numbers:

• Newspaper division revenue was down 13 percent; the previous quarter it declined a mere seven percent.
• Print advertising declined 21 percent; that’s worse than the 14 percent decline the previous quarter.
• Revenues at the company’s magazine group were down 18 percent; in Q3 they were down a mere four percent. Newsweek’s revenue dropped 22 percent, and that decline will continue as the company pares back its circulation base.
• The good news I promised? Online revenue was up five percent, and display ads were up 10 percent. Both of those numbers represent decelerations from Q3, when overall online revenue was up 13 percent and display was up 32 percent. But that’s better than the folks over at the Times, who saw online ads shrink altogether in Q4.

Why would the Times see online revenue fall off a cliff while the Post only saw growth slow? I’m open to suggestions: The most obvious one is that the Times has much more national exposure than the Post (both companies also have regional papers in the mix, and the Times’s results include its About.com unit). But if anything, you’d think that disparity would benefit the Times. Anyone else want to weigh in?

I do take exception to the notion that this was the first time this had ever happened: Doesn’t anyone remember Jeff Gannon of Talon News, who lobbed those piercing questions at George W. a few years ago?

But in any case, the distinction between new/established online/offline news organizations is melting away very rapidly, whether anyone likes it or not. And, really, as Jon Stewart ably explains, who cares?

Because they can, of course. And because the presidency-to-be has already provided a short-term boost for media companies who’ve been able to feed the public’s appetite for all things Obama. The New York Times, for example, says it generated $2.3 million in much-needed extra revenue via the sale of its commemorative election day edition and other paraphernalia.

So it will be nearly impossible to boot up your browser on Tuesday and not end up watching a live stream of the pomp and circumstance; the actual swearing-in ceremony is scheduled for noon Eastern Standard Time.

But just in case your online venue of choice gets the hiccups, here’s a list of sites that promise to provide coverage; I’ve also embedded a stream from Hulu (which is using the Fox broadcast’s feed) at the bottom of this post if you’d prefer to stay right here.

I’m sure I’ve probably missed several dozen options: If you’ve got a site you want to add to the list, do so in comments below or contact me at peter@allthingsd.com or via the blind tip box here.

Presidential Inauguration Committee (Microsoft-haters beware: This stream will require the company’s Silverlight player)

Joint Congressional Committee

New York Times

Washington Post

ABC News

CNN (features obligatory Facebook tie-in)

C-SPAN

CBS News

MSNBC

Fox News

Joost (Joost would like to point out that unlike some of the options listed here, its feed will be available for  international audiences).

Current TV (features obligatory Twitter tie-in)

Livestation (requires download; player allows viewers to flip between coverage from Al Jazeera, C-Span, BBC, euronews, France 24, Russia Today).

One major video outlet that apparently won’t be streaming the event live: The biggest–Google’s (GOOG) YouTube. But YouTube’s Inauguration Channel is serving up plenty of video during the run-up.

And if you couldn’t score tickets to the Huffington Post’s pre-inaugural ball Monday night with the likes of Tom Hanks, Steven Spielberg and, um, Ashton Kutcher, don’t fret: The news aggregator promises to provide both live video and live blogging of the event.

So what’s left to sell? The front page.

Today’s edition of the Times features the first display ad the paper has ever sold on its front page. We’re talking about the print edition here–the Times Web site has long been strewn with ads, including those annoying/awesome Apple (AAPL) ads that stretched across most of the front page.

Given that it’s a historic move, the ad in question is a pretty dull piece of marketing: A modest little thing promoting programming at CBS (CBS). Behold! (It’s all the way at the bottom, in case you’re confused.)

Then again, this is only historic because the Times management has been so stubborn about keeping its front page pristine. It’s hard to imagine that any reader will care.

As the Times itself informs us, The Wall Street Journal (owned by Dow Jones, which also owns this site) sold ads on its front page even prior to its acquisition by Rupert Murdoch and News Corp. (NWS); so does Gannett’s (GCI) USA Today and Tribune’s Los Angeles Times. Now the only major holdout is the Washington Post (WPO).

But the Washington Post is owned by a parent company that’s still actually relatively healthy (because it’s not actually a media company, but an education company).

And you can’t say that about the Times, which reported a miserable November and has a looming cash crunch. So if the paper can find anything else it can sell, expect to it part ways with that, too.